This lets you speak a name to dial a number instead of entering a number manually or choosing it from the phone book.
There are two types: speaker-dependent (recorded) and speaker-independent (recognition).
With speaker-dependent, voice dial entries (or "tags") must be explicitly created by speaking and recording the name 1-3 times. The phone will only respond to recorded names, and usually only when spoken by the same person who recorded them. The maximum number of voice dial entries is usually limited to a fraction of the size of the whole phone book.
With speaker-independent voice recognition, no recording is required. The name can be spoken by anyone, and the phone will automatically match the spoken name with the closest name entered in the phone book.
Speaker-dependent is the most common type, especially on older phones. If the type isn't specified, it is usually speaker-dependent.